Messrs ARBAB COTTON INDUSTRIES AND OIL MILLS through Managing Partner
This first appeal challenged an order passed by the Banking Court, which refused to set aside an ex parte judgment and decree previously issued against the appellant in a recovery suit filed by a respondent bank. The appellant argued that the Banking Court had prioritized technicalities over fair adjudication and failed to properly appreciate the record. The core legal question was whether an application to set aside an ex parte judgment and decree, passed on merits by a Banking Court, is maintainable under the relevant financial recovery laws. Upon review, the Court observed that the Banking Court had indeed passed the decree on merits after examining the record and the appellant's application for leave to defend, even while proceeding ex parte. The Court held that a judgment and decree passed on merits cannot be set aside under the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The established principle is that the appropriate remedy in such circumstances is to file an appeal against the judgment and decree itself, rather than seeking to set aside the ex parte order.
- Is an application to set aside an ex parte judgment and decree passed on merits by a Banking Court maintainable under the Financial Institutions (Recovery of Finances) Ordinance, 2001?
- What is the appropriate legal remedy for a party aggrieved by an ex parte judgment and decree passed on merits by a Banking Court?
- Section 12, Financial Institutions (Recovery of Finances) Ordinance 2001
ORDER
ABDUL SATTAR, J.---Through this first appeal against order, the appellant seeks setting aside of impugned order dated 04.04.2013 passed by learned Judge Banking Court-I, Multan, whereby the said court refused to set aside ex parte judgment and decree dated 07.09.2009.
2. Brief facts of the case are that respondent bank filed a recoyery suit for sum of Rs.2,42,60,302/08 against the appellant before learned Judge Banking Court-I, Multan and the appellant after putting up appearance filed an application for leave to contest the suit, which was not pursued and dismissed for want of prosecution and thereafter the suit was eventually decreed ex parte against the appellant vide judgment and decree dated 07.09.2609. The appellant filed an application before the Banking Court for setting aside ex parte judgment and decree dated 07.09.2009 and restoration of the application for leave to contest the suit, which was however, dismissed by the learned Judge Banking Court-I, Multan vide order dated 04.4.2013. Hence, this appeal.
3. Learned counsel for the appellant has argued that the impugned order is against law and facts and outcome of mis-reading and misappreciation of record of the suit. Further argued that learned Judge Banking Court-I, Multan arbitrarily gave preference to technicalities over fair adjudication, which demanded ignoring of minor defaults of the appellant, hence, this appeal be allowed.
4. Learned counsel for the respondent bank has vehemently opposed the FAO as being not maintainable under the law.
5. Arguments heard. Record perused.
6. We have noticed that despite proceeding ex parte against the appellant, the Banking Court passed the judgment and decree on merits after going through the record and the defence taken by the appellant in its application for leave to defend. It is also observed that the Banking Court reduced the claim of the respondent bank by deducting the amounts, which were not lawfully due.
The judgment and decree passed on merits could not be set aside under section 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The only remedy available to the appellant was to file the appeal against the said judgment and decree. This court has already expressed views in the cases "Mst. Tahira Yasmeen and another v. Muslim Commercial Bank through Branch Manager and 6 others (2005 CLD Lahore 927), Messrs Sahib Gas Ways through Partner and 4 others v. The Bank of Punjab through Manager (2013 CLD Lahore 501) and Messrs Ammar Rice Dealers and 2 others v. National Bank of Pakistan and others (2003 CLD Lahore 857) that in a similar situation as in this case the application for setting aside ex parte judgment and decree is not maintainable, therefore, FAO in hand cannot succeed, which is dismissed.
Cited by 3 cases
- M/S Makkah Traders etc. vs MCB Bank Limited 2022 LHC 7493
- Messrs Makkah Traders through Managing Partner and 3 others vs MCB 2023 CLD 307
- M/S Makkah Traders, etc vs MCB Bank Limited 2023 PCTLR 42